Lendlease has successfully obtained the $1.7 billion contract for the redevelopment of Queen Victoria Market in Melbourne. The project, undertaken by the second-largest city in Australia, will involve the construction of approximately 1,700 residential units, an office tower, and a public park adjacent to the 140-year-old fresh produce market.

ASX-listed Lendlease confirmed the news on Tuesday, following the initial report by The Australian Financial Review in December. This undertaking represents the largest urban renewal project ever undertaken by the city. Lendlease, known for its large-scale urban redevelopment initiatives, is focusing on this project as part of the multi-year turnaround strategy led by CEO Tony Lombardo. Their plans include a 28-story office tower spanning 43,000 square meters, a 560-unit build-to-rent (BTR) and affordable unit tower, and a 1.8-hectare public park.

Separately, student housing provider Scape will develop a student accommodation tower called Gurrowa Place on the 3.2-hectare site, with an estimated cost of $350-$400 million. The tower will have 1,100 beds and will be located on Franklin, Queen, and Peel streets. “Gurrowa” translates to “a place of trade and interchange” in the language of the Wurundjeri Woi-wurrung people, the traditional custodians of the land where the market is situated.

The completion date is set for 2028, two years later than the initially projected 2026. Lendlease cannot provide a revenue booking timeline as the project’s master planning is yet to be completed.

The existing heritage Franklin Street Stores will be transformed into a new retail village, and an underground car park with 220 spaces will be constructed beneath the site to serve traders and visitors. Additionally, a civic pavilion named the Queen’s Corner Building will be located on the eastern side of the new public park, acting as a significant feature of the precinct.

Both the commercial and residential buildings will be powered solely by electricity and strive to achieve net-zero operational carbon emissions, according to Lendlease. The office tower aims to obtain a six-star Green Star Buildings v1 Rev B rating, while the residential buildings aim for a five-star rating.

The project’s value has more than tripled since it was initially introduced in mid-2021, originally estimated at $520 million for the development of 600 units.

The southern site, located at the end of the seven-hectare market precinct, was established by extending Franklin Street along the northern edge of the site until Dudley Street, creating a new vehicular route to Docklands.

As part of the development plan, the Victorian government will transfer 7,602 square meters of Crown land at the southern end of the site to the city, which will subsequently sell it to the developer.

Quotes attributable to Tom Mackellar, Managing Director of Development, Lendlease

“Delivering this project is a once-in-a generation opportunity to be part of one of Melbourne’s most iconic and beloved landmarks that has been serving the people of Melbourne for the past 140 years.

“The creation of Gurrowa Place begins the next chapter in the evolution of Queen Victoria Market. It will celebrate the rich history of the place, while introducing new spaces for the community and a vibrant precinct that welcomes locals and visitors.

“Lendlease looks forward to working alongside the City of Melbourne, Scape and all project partners, and the community to deliver a reimagined precinct that preserves the heart and soul of this Melbourne landmark while ensuring it continues to thrive.”

Quotes attributable to Sally Capp, Lord Mayor, City of Melbourne

“This landmark project is a strong sign of confidence in Melbourne as a destination for investment, workers, residents and visitors.” 

“This $1.7 billion project will deliver connected office space, student housing, affordable housing and more parking for market customers.” 

“We know this investment will attract thousands of new residents, workers and visitors, all while boosting business for traders.”

“We’re proud to partner with Lendlease to deliver on our commitment to secure the market’s future and maintain a focus on parking for traders and customers.”